Is It Time for the United States to Consider the Patent Box?

March 2012

At a glance

PwC Tax leaders examine the patent box regimes adopted by six EU countries and consider key issues to be addressed in designing a similar tax regime for intellectual property (IP) in the United States that would attract and retain domestic IP development and ownership.

Given the tax benefits provided in some EU countries for holding IP, the question arises whether the United States should adopt similar incentives and, if so, how they should be designed. The details of the different regimes adopted in other countries laid out in this article indicate key issues that would need to be addressed in designing a U.S. IP box to attract and retain domestic IP development and ownership. These questions include: What types of IP should be eligible? What types of IP-related income should receive preferential treatment? How should qualified IP income be taxed? What would be the revenue cost of adopting a patent box regime?

This article first appeared in the March 26, 2012 edition of Tax Notes